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RESTRICTED GENERAL AGREEMENT ON L/247 TARIFFS AND TRADE J* ***" "" „/ Limited Distribution EUROPEAN COAL AM) STEEL COMMUNITY Note by the Executive Secretary for the Ninth Session of the CONTRACTING PARTIES I. Introduction 1. In accordance with the instructions of the CONTRACTING PARTIES at the Eighth Session (SR.8/18) the following note has been prepared in order to facilitate the examination of the Second Annual Report by the member States of the European Coal and Steel Community (L/240). This note is addressed principally to the under­ takings of the member States as set out in the preamble to the Decision of 10 November 1952, which are intended to protect the interests and trade of other contracting parties. It is concerned, first, with the changes in the customs duties and restrictions of the member States applicable to their trade with third countries; secondly, with certain administrative arrangements made by the Exec­ utive Secretary with the High Authority pursuant to recommendations adopted by the CONTRACTING PARTIES at the Eighth Session and thirdly with developments in commer­ cial relations with third countries, the control of prices and the availability of supplies - which were matters of special interest to contracting parties at the Eighth Session. Finally, the note provides some statistical data reflecting developments, since the establishment of the common market, in prices of Treaty products and in trade with third countries. II. Customs duties and import restrictions 2. Since the Eighth Session there have been no extensive changes in the duties and restrictions applied by the member States to imports of coal, iron ore, scrap and common steel from third countries. Those of special significance are the changes in the control of products from the dollar area to the Benelux countries and the application of the special temporary compensation tax to some Treaty products by the Government of France. These and a few other amendments are men­ tioned in Annex I. Little further progress has been made since the Eighth Session towards the harmonization of customs duties and trade regulations for these products. 3. None of the items of special steel for which a common market was established on 1 August 1954 is bound against duty increase in a GATT schedule. The duties applied to imports from third countries have been extensively modified in order to achieve a harmonization of tariffs. French duties have been reduced and German duties increased so that the tariffs applied by the two countries are now princi­ pally the same. These rates are applied also in the Benelux countries for quanti­ ties imported outside tariff quotas which are intended to admit quantities required fox internal consumption in Benelux countries at the former rates of duty. The changes introduced in the tariffs and regulations applied to special steel are summarized in Annex I. L/247 Page 2 III. Export duties and restrictions 4. No duties are levied by member States on the export of special steel products and in April 1954 the French Government suspended the duty on the export of scrap. 5. At the Eighth Session the CONTRACTING PARTIES were interested in the restrictions on exports of scrap which were maintained under the authority of paragraph 6 of the Dec?, s ion of 10 November 1952. It was explained that the Governments of the member States intended to maintain these restrictions as a temporary measure because of the difficulties experienced in ensuring an adequate supply; in the administration of the restrictions there was no discrimination as between countries of destination, and it was expected by the High Authority that the restrictions could be relaxed in the hear future for certain qualities. The changes in these restrictions since the Eighth Session are mentioned in the report of the member States. It might be noted that a Scrap Office was set up by the Community to control the quantities to be imported and the prices to be charged, but apparently this office has no jurisdiction over exports, 6. In view of the fact that the High Authority has power to restrict exports of Treaty products in time of shurta^e, some countries outside the Community have sought to guard themselves against a possible interruption of their normal supplies by obtaining guarantees of supplies ht Treaty products in time of shortage. For example, French and German coal producers, when they obtained last year a loan from Swiss banks, guaranteed to Swiss importers a minimum supply of coal even in time of shortage and when French steel producers obtained a loan from Swiss bank3 in August 1954, they also guaranteed to Switzerland a minimum supply of pig iron and rolled sheets of 100,000 tons per year; this figure would be increased to 140,000 tons if Switzerland had bought more than 100,000 tons during the thirty-six months preceding the date on which shortage is declared. IV. Negotiations on economic and trading relations with third countries 7. The member States and thé High Authority informed the CONTRACTING PARTIES at the Eighth Session that it was their intention to initiate negotiations with third countries on economic and commercial relations concerning coal and steel. The CONTRACTING PARTIES expressed the hope that the necessary arrangements would be made to ensure that these negotiations would be completed by 1 May 1954 (the date intended for the opening of the common market for special steel). The High Authority, on behalf of the six member States, entered into negotiations with the Government of Austria in June 1954, but these negotiations had not been concludnd when the common market for special 3teel was established on 1 August. L/247 Page 3 V. Control of export prices 8. At the Eighth Session the CONTRACTING PARTIES took note of the assurance given by the High Authority that it would take every measure in its power to ensure that equitable prices are charged in markets outside the Community and that no arrangement or combination between producers would impair the value of this undertaking. The CONTRACTING- PARTIES expressed the hope that the High Authority.would see its way to make public - or at least to communicate to contracting parties concerned - the results of the examination it was conducting at that time of producers agreements as well as the remedial measures it might decide to take. Since the Eighth Session the High Authority has studied this question in relation to the activities of the group known as the Brussels Export Convention, but no report has been received so far from the High Authority. A spokesman' of the High Authority has announced, however, that "the powers created by the Treaty will be used without hesitation if the prices of steel exports from pool countries to outside destinations should become inequitable.-" According to unofficial reports, prices for exports have been fixed under the Export Convention and it appears that price differentials as between countries of destination still apply. VI. The Commoxi Nomenclature 9. The revised tariff nomenclature for coal and steel products, appended to the first annual report, which was adopted by the six Governments on 1 May 1953,has been modified during 1954. A table giving the numbers, on the basis of the new nomenclature, in the Benelux, French, German and Italian tariffs, for the coal and steel items for which the common market is operative, is being prepared by the GATT secretariat and will be distributed if possible before the opening of the Session. This table will replace that appended to the Working Party report adopted by the CONTRACTING PARTIES on 10 November 1952 (cf. pp. 90-93, BISD, 1st Supplement). VII. Arrangements for the publication of the changes in the tariff and regulations applicable to Treaty Products 10. At the Eighth Session, seme delegates asked that arrangements be made through the Executive Secretary to enable the contracting parties to receive as quickly as possible reliable information on changes made in tariffs and other regulations by member countries affecting Treaty products. The Executive Secretary therefore made arrangements with the secretariat of the Council of Ministers of the Community to receive both legal and administrative changes in French. These, together with English translations prepared by the GATT secretariat were to be published in the monthly Trade News Bulletin. 11. In practice, this system has not worked out as satisfactorily as was expected, because the information was often received too long after the decrees and regulations were put into effect. In many cases the notices of changes had already been published in the bulletin on the b§csis of earlier information. L/247 Page 4 12. It is suggested that the Executive Secretary should discuss with the officials of the Community and with the delegations who were interested in this problem ways and means of improving the system tentatively adopted last year with a view to ensuring a more practical and speedy distribution of changes relating to Treaty products. VIII. Recent trends in production of and trade in Treaty products 13. When the Executive Secretary*s note to the Eighth Session was prepared in September 1953, not sufficient time had elapsed since the opening of the common market for coal and steel for its effects on production and prices to be seen. This applies also on this occasion to the effects of the opening of the common market for special steel. The examination of trade statistics and other data does not reveal any evidence of substantial changes or distortions having resulted so far from the opening of the common market in coal, iron and common steel as regards sales to, and receipts from, third countries. A. Production 14. Recent production trends have been similar for the Community and other countries.

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